Citi raised its price target for Meta Platforms (NASDAQ:META) to $360 from $315 in a note Tuesday, with analysts maintaining a Buy rating on the stock.
They told investors that Instagram engagement and monetization are improving, while Reels ad loads have reached 17% quarter-to-date as per the firm's proprietary tracking.
"The broader online advertising market is stable-to-improving based on our attendance at the Cannes-Lions Festival of Creativity last week, we are raising our '24 ad projections and price target to $360 on shares of our top-pick Meta," wrote the analysts.
"Our 17% 2Q23 QTD Reels ad load compares to 1Q's 16% and we believe Reels is experiencing greater advertiser adoption given its Lo-Fi approach to ads, newer ad products, and continued engagement growth. The latter of which is likely resulting in greater usage across Feed, Stories, Messenger, and WhatsApp."
Citi now sees 2024 advertising revenue growth of 14% Y/Y and believes Meta's investments in GenAI "can deliver incremental usage across its users, creators, and advertisers."